MEMPHIS, Tenn. (AP) -- Discount retailer Fred's Inc. said Thursday its March revenue at stores open at least a year fell 3 percent, hurt by unseasonably cool weather and a timing shift in the Easter holiday.
The drop was bigger than Wall Street expected. Analysts polled by Thomson Reuters expected a decrease of 1.7 percent. The metric is a key measure of a retailer's health, because it excludes revenue at stores that recently opened or closed.
Total sales for the five-week period ended April 6, fell 2 percent to $190.4 million from $194 million.
Fred's said that as expected, cooler-than-usual weather in many parts of the country and the timing of the Easter holiday reduced March sales at its lawn and garden and seasonal departments.
The company's pharmacy department got a boost from strong prescription growth, but those gains were offset by the continued shift toward generic drugs, which resulted in lower overall pharmacy sales. The company said it expects that trend to continue throughout most of the year.
For the first two months of fiscal 2013, revenue at stores open at least a year fell 2.3 percent, while total sales edged down 1 percent to $349.4 million from $352.9 million.
Fred's operates 713 stores, including 21 franchised stores, in the southeastern U.S.
Shares of Fred's Inc. closed Wednesday at $13.76, up about 3.4 percent since the start of the year.